Statement by Mr. Mukhisa Kituyi, Secretary General

Diagnostic Trade Integration Study of Djibouti: Update validation seminar (Opening ceremony)

16 February 2015

Ladies and Gentlemen,

It is my pleasure to be with you today and officially open the Diagnostic Trade Integration Study (DTIS) update validation seminar. It is a great honour for UNCTAD to have been selected by the Government of Djibouti to carry out its DTIS update.

Ladies and Gentlemen,

Djibouti has successfully built comparative advantages in the area of trade facilitation - which relates to the port and the corresponding transport and logistics activities - and finance and telecommunications. It also envisions developing further its tourism and fishing industries.

The strategic vision of Djibouti needs to take into account its specific characteristics: Djibouti lies at the junction of the Red Sea and the Gulf of Aden and it is located in a sub-region with large landlocked States: Ethiopia, with its 92 million inhabitants, and the new independent State of South Sudan. The DTIS update emphasizes that Djibouti's location and the small size of its economy call for a growth strategy based on the production of services for the sub-region.

The main challenge is to translate these advantages into an "inclusive" growth strategy, that is, a strategy which creates jobs and reduces poverty and inequality. We hope that the DTIS update and its action matrix provide the government the necessary tools to make its strategic vision operational.

The DTIS update shows that there are various areas of opportunity for promoting inclusive growth.

One of these areas relates to Djibouti's basic infrastructure that is of good quality and a potential source of employment. Yet, the potential gains from this infrastructure escape the local economy. For instance, transport and logistics services for the corridor between Djibouti and Addis Ababa are mainly provided by Ethiopian operators and workers. In terms of freight, Djibouti does not even cover the amount of traffic conferred by the Djibouti- Ethiopian Joint Commission.

And there is a risk of reproducing this phenomenon in the area of information and communication technologies. The submarine cables are generating public revenue through the payment of access rights by neighboring countries. However, Internet connection in Djibouti is still rather slow and so is the development of potential services based on IT.

The DTIS update also examined the potential of the tourism and fisheries sector and how supply capacity could be developed. The study points out that a lower cost of electricity and an appropriate access to ICTs are key prerequisites for the development of a sustainable tourism sector.

The study also highlights the relevance of the Port and the corridor with Ethiopia. Djibouti's desire to attract foreign investment and become the gateway to COMESA, make improving trade facilitation and logistics a priority. This requires increasing the efficiency of the supply chains and mobilizing investment in transport and communication infrastructure.

Furthermore, improving trade facilitation and logistics is also dependent on capacity building. This is one of our areas of expertise. I am proud to say that our TRAINFORTRADE and ASYCUDA programmes are already operating in Djibouti and help streamlining port and customs operations.

Ladies and Gentlemen,

Trade facilitation and logistics for a corridor cannot be carried out in isolation. They require coordination with partner countries, in this case Ethiopia. Since UNCTAD is also carrying out the DTIS update of Ethiopia, there is scope for coordinating proposed actions in the area of trade facilitation and corridor issues. For instance, UNCTAD and EIF partners could facilitate joint meetings on how to effectively coordinate the implementation of these areas in their respective action matrices.

I sincerely hope that the DTIS update assists Djibouti to harness its talents and assets so that it can better benefit from international trade. You can rest assured that UNCTAD will continue assisting you in your efforts to find a sustainable and inclusive development path.

Thank you very much.